Verod Capital Management (Verod), a leading West African private equity firm, has received regulatory approvals for its acquisition of 100% of the shareholding of Metropolitan Life Insurance Nigeria Limited (Metropolitan Life Nigeria, or, the Company), from South African-based Momentum Metropolitan Holdings Limited, (Momentum Metropolitan, formerly MMI Holdings Limited). The transaction, for an undisclosed amount, sees Momentum Metropolitan exit the Nigerian market, in line with its articulated Reset and Grow strategy.
The insurance sector in Nigeria as a whole is entering a new growth phase, with the recent announcement of increased minimum capital requirements by the industry regulator. This, in addition to various other initiatives being pursued by both regulators and industry participants, is expected to result in improved insurance penetration and performance in the sector. Having closely monitored these developments over the last several years, Verod sees significant opportunities within the sector and believes that this inflection point is the right time to enter the market and that Metropolitan Life Nigeria presents a solid platform for rapid growth.
“Low levels of insurance penetration, even compared to other African economies, point to untapped opportunities within the sector,” said Eric Idiahi, Partner at Verod, pointing out that, “NAICOM, the insurance regulator, has made concerted efforts towards creating an enabling environment; we believe that these actions, in addition to product innovation supported by increased public awareness and investments in technology-driven distribution channels, are the triggers that this sector needs to close the insurance penetration gap”.
Metropolitan Life Nigeria is a life insurance company offering group life and credit life products to clients across the public and private spheres. Verod has plans for expansion and with their added expertise, anticipates growth in market-share in this sector.
Momentum Metropolitan has been a major shareholder in Metropolitan Life Nigeria for the past 12 years and has steered the Company through various phases of its growth trajectory. Over the last three years, as the sole shareholder in the Company, the Momentum Metropolitan led Board has made some bold decisions with respect to risk management, underwriting practices and claims process that have positioned the Company on the right footing for future growth.
In 2017, Momentum Metropolitan announced its intention to initiate an ongoing review of its African footprint. The company advanced this focus with the announcement of its Reset and Grow strategy in September 2018. The strategy includes an increased focus on successfully growing the core businesses in South Africa, ongoing review of African operations, as well as delivering and enhancing shareholder value in the countries in Africa where Momentum Metropolitan will maintain a market presence.
“We would like to take this opportunity to sincerely thank various stakeholders that have fully supported us during our presence in the Nigerian market, ranging from our Board, employees and management, to our clients, distribution partners such as brokers and banking institutions, and NAICOM and other regulators,” said Kudakwashe Mudzengi, acting CEO of Momentum Metropolitan Africa. He added that, “We are confident that Verod Capital will continue to provide our stakeholders with the support and confidence needed in a shareholder. Verod Capital, as a West African investor with local knowledge and presence, will be in a good position to support the staff and management team towards providing a solid client value proposition and excellent client service. Verod Capital has the capacity, expertise and network to support the business to continue to expand and to provide future innovative insurance solutions”.
